A new rent-to-buy scheme has been announced by the South Australian government in a push to help long-term renters enter the property market.
The initiative, the first of the government’s state budget announcements, aims to accelerate home ownership for eligible participants.
The scheme centres on newly constructed, affordable homes, such as those being built in Woodville Park.
Participants will sign an intent to buy, with the property price fixed at $517,000. Renters accepted into the program will pay 75 per cent of the prevailing market rental rate, with the expectation that the remaining 25 per cent will be saved towards a deposit.
After a two-year period, occupants will have the first right to purchase the property.
“There’ll be a strong incentive on people to do the right thing and there will also be an encumbrance on the property so you won’t be able to flip it,” Housing Minister Nick Champion said.
“You’ll have to live in it for two years.”
The initial phase of the policy will involve the construction of 100 homes across Adelaide.
“I think it cuts through a lot of boundaries I would have had if this wasn’t in place,” house hunter Savinna said.
While the opposition says it supports the concept, it says it doesn’t go far enough.
“I don’t think this will be a silver bullet to fix the housing crisis,” spokeswoman Michelle Lensink said.
Rent-to-buy schemes are currently run in Victoria and NSW. A similar scheme previously existed in South Australia but was discontinued in the 1960s.
“You’ll never get another chance like this,” Champion said.
“Effectively, you’ll be setting the price when you move in which means when you come to buy it, prices would have moved up.”
Construction is scheduled to commence in the next six months.
